Revaluation Model - Fair Value

CFA Level I FRA
#1

Hi All,

How do we know what should be the actual fair value to be considered for the revaluation model, because in general, Fair Value refers to the actual value of an asset – a product, [stock] or security – that is agreed upon by both the seller and the buyer.

Since, we are not selling an asset there wont be any buyers or sellers. So, how do we derive the fair value in this case.

#2

The question will provide you a table (most likely) that will include a line that says “Fair Value”, just use that number. Don’t overthink it too much!